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Frequently Asked Questions: +Knowledge Base
What is foreclosure?
A foreclosure is when a mortgage lender assumes ownership of a property as a result of missed mortgage payments. It allows the property to be recouped if the agreement in the promissory note is breached by the borrower.
Why is the date of first missed payment important?
The loan servicer usually allows for a 10 to 15 day grace period on a missed payment and after that, a late fee may apply. Drawing up a loss mitigation plan is important at this stage to stave off further damage.
Pre-Foreclosure and Loss Mitigation?
A loan servicer generally waits until at least 120 days of delinquency have passed before filing a state court case to begin the foreclosure process. This is another opportunity for the homeowner to find a solution to the delinquency with the loan servicer.
What is a Breech Letter?
Lenders are required to send out this letter before officially beginning the foreclosure proceedings. If that grace period expires and the homeowner does not resolve the default, then the servicer usually refers the file to their attorney to start the foreclosure process.
What is Lis Pendans?
Kentucky is considered a judicial foreclosure state, which means that the lender has to file a lawsuit in order to foreclose on a home. This is the term for the formal process that begins the action of foreclosure. It is a written notice that litigation concerning real estate has been filed.
What is a Foreclosure Sale or Auction?
The sale is typically an auction wherein the property is sold to the highest bidder. Sometimes the bidder is the lender. Sometimes when the property does not sell or otherwise reverts to the lender, it becomes an REO, or real estate owned, property.
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